There are many difficulties when it comes to starting up a small business, least of these issues about the acquisition of capital to be used in the company’s startup and eventual growth. Seeing as most small businesses do not themselves have an extensive credit they are often forced to obtain financing with high-interest rates or with inflexible terms. This can lead to a burden on cash flow, making it difficult for the business to grow. This may be the perfect time to consider refinancing.
When is it Time?
Knowing the best time to refinance can be tricky to figure out. It should only be done when it will lead to a reduction in debt burden on your business. If your company has grown since your original loan, you may be able to obtain a loan with better terms.
Interest Rate is Still High
If after a few years of operating and growth you are still paying the same high rate you may want to consider refinancing. If you have several years of operation and your annual revenue exceeds $250,000, you may qualify for a loan with better rates.
Despite your initial credit score not being the most desirable, you still managed to get that loan you needed. That being said the rates that came along with it were not the easiest to stomach, but it was the only way you were able to get the loan with your bad credit. But since then your business has grown, and you have been up to date on paying your investments, and therefore your credit has gone up. This may be the signal to refinance.
AmeriFactors offers top-tier associates skilled in understanding what form of funds, bethey a business cash advance or an asset-based loan, best suits the needs of small businesses seeking to expand their horizons. For more information, please feel free to contact us at 1-800-884-FUND.